When it comes to revenue-based funding (RBF) one of the most common questions from startups is “how does it compare to selling stock?” At the end of the day, is it smarter to sell some shares to an angel investor or venture capitalist, or to take an RBF obligation instead? The problem is, a lot depends on the intricate details of any one situation. So rather than getting bogged down in all possible variations, perhaps we can shed some light by asking a different question: What about Google? Would RBF have been a good or bad idea for Google as an alternative to selling stock? Read more of this post

People often ask about the comparative risks/rewards between traditional venture capital (equity-based funding), bank loans (debt) and revenue-based funding. While there are many ways to evaluate the broad concept of “risk” (ranging from Modigliani-Miller theorems to pop-psychology), one approach is to simply ask “what happens if I succeed or fail?”

Viewed this way, risk depends on whether you’re an investor giving out money or an entrepreneur receiving it. If you’re an investor, the comparison can be visualized below: Read more of this post

There’s a difference between traditional venture capital and corporate venture capital. While standard VCs are primarily concerned with financial goals (i.e. a high IRR%), corporate venture capital (CVC) groups such as Intel Capital, GE Capital, and the J&J Development Corp. have dual goals: financial and ‘strategic’ value. CVC investments must somehow assist the core business of their parent companies in addition to creating financial returns. Read more of this post